Yet as Canberra continues to be the focal point of Beijing’s economic coercion and loosens, industry growth andnbsp, & nbsp,
The Anthony Albanese administration has enthusiastically resumed father Scott Morrison’s initiative to increase American exports to more areas in order to counteract perceived over-reliance on China.
Trade Minister Don Farrell has presided over the implementation of free trade agreements with nbsp, India, the UK, and the United Kingdom in just under 18 months in the portfolio. He has also pushed for improvement in conversations with the European Union. & nbsp,
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership ( CPTPP ) has been joined by the United Kingdom, and Australia’s free trade agreement with ASEAN and New Zealand is being upgraded andnbsp.
Despite these commerce victories, Australia also has a significant Taiwan-shaped hole in its efforts to lessen its reliance on China for exports. Australia’s fourth-largest export location for goods was the Taiwanese economy, which in 2022 sucked in a massive AU$ 30 billion( US$ 19.1 billion ) worth of American goods. & nbsp,
It was more than twice as important as New Zealand and nearly ten times more profitable for American products exporters than the United Kingdom, surpassing actually India and the European Union.
About 40 % of Australia’s total goods exports to the 10 part express ASEAN sector, which has 667 million residents, go to Taiwan, where there are only under 24 million people.
This does not imply that Australia may downplay or reject the significance of free trade agreements with countries like the United Kingdom, the European Union, and India.
Given the size and wealth of the European Union and the Indian markets, as well as the stupendous & nbsp, growth potential, of each, the trade agreements with the latter are likely to have the greatest long-term benefits for Australian exporters.
However, if pursuing a bilateral trade deal with the United Kingdom or bringing it into the CPTPP is worthwhile for Australia, then there is strong monetary evidence in favor of doing the same with Taiwan, an export industry that is significantly more significant for Australians. When examining the overall state of Australia’s industry ties, this Taiwan oversight is especially striking.
Despite shared membership of the World Trade Organization and Asia – Pacific Economic Cooperation ( APEC ), Taiwan is conspicuously absent from Australia’s free trade agreements. Of Australia’s & nbsp, top 10 export destinations & nbsp, in 2022, Taiwan was the only one in which Australian exporters didn’t enjoy the benefits of either a bilateral or regional free trade agreement.
Real, Australia’s exports to Taiwan by worth are dominated by & nbsp, energy and nutrients, which don’t experience higher taxes. But with agricultural imports to Taiwan subjected to average tariff rates of nearly & nbsp, 16 %, a free trade agreement would give Australian primary producers a competitive edge in one of Asia’s & nbsp, wealthiest & nbsp, consumer markets. & nbsp,
Given that it was Australia’s & nbsp, wine growers & nbsp, and & nbsp, lobster fishers & nbsp, that suffered most at the hands of & nbsp, China’s economic coercion, there is a powerful case for gaining better access for Australian agricultural products in reliable export markets like Taiwan.
Regardless of the financial logic, any force for freer trade with Taiwan can’t leave the boundaries of geography.
Getting Taiwan into the CPTPP will probably remain an implausibly long shot given Beijing’s & nbsp, competing bid & nbsp, and & nbsp, opposition & nbsp, to Taipei joining combined with the trade pact’s & nbsp, consensus – based & nbsp, accession process. & nbsp,
But that still leaves opened the option of pursuing a much more reasonable diplomatic free trade agreement with Taiwan. With Australia already Taiwan’s & nbsp, seventh – largest & nbsp, trading partner, this is an option that Taipei & nbsp, also supports.
Having & nbsp, pressured Canberra & nbsp, out of its previous plan to negotiate a free trade agreement with Taipei during the Malcolm Turnbull government, Beijing would oppose moves to formally liberalize trade.
Although & nbsp, Singapore & nbsp, and & nbsp, New Zealand & nbsp, already have free trade agreements with Taiwan, these were signed in 2013 when the more Beijing – friendly Nationalist government was in power and when China wasn’t trying so hard to & nbsp, internationally isolate & nbsp, Taipei. & nbsp,
Despite good criticism from Beijing, the Albanese government doesn’t permit its deal access agenda to get held hostage to Taiwanese government concerns. Not least because Beijing’s enthusiasm for & nbsp, relationship repair & nbsp, probably gives Canberra more license to take positions that China doesn’t like.
Since mid – 2022, Beijing has moved to & nbsp, normalize diplomatic ties & nbsp, and incrementally & nbsp, dismantle trade restrictions & nbsp, despite Canberra continuing to pursue policies that & nbsp, disappoint the Chinese government & nbsp,— everything from & nbsp, securitizing & nbsp, Australia’s critical minerals industry to & nbsp, calling out & nbsp, China’s human rights abuses in the United Nations. & nbsp,
The next 17 months of bilateral relationship maintenance suggest that China didn’t been dissuaded from embracing warmer ties with Australia, despite Beijing’s diplomatic rebukes and secret instructions if it tries to negotiate a free trade agreement with Taipei.
Business plan isn’t entirely driven by economic complementarities in a time when interdependence is being used more frequently. Confidence is important as well. Fortunately, there is a lot of both in the Australia-Taiwan connection. & nbsp,
In addition to the fact that the American and Chinese economies now trade a sizeable amount, increased export dependence on Taiwan carries very little risk of economic coercion.
Strong financial complementarities between the American and Taiwanese economies may bind them together for many years to come. Australia can be sure that Taiwan didn’t use trade relations to advance political agendas, in contrast to China.
Author of the newsletter & nbsp, Beijing to Canberra and Back, which chronicles Australia-China relations, Benjamin Herscovitch is a research fellow at The Australian National University.
This andnbsp, post, and was originally published by East Asia Forum and are being reprinted with permission from Creative Commons.